TMI Blog2013 (10) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... is violated, condition No. 5 of Notification No. 97/2004 dated 19/07/2004 automatically comes into picture and the appellant would no longer be eligible for the benefit of the said Notification. Consequently, the goods imported is liable to confiscation under Section 111(o) of the Customs Act, 1962 inasmuch as the end-use condition stands violated and the appellant would be liable to penalty apart from losing the benefit of Notification NO. 97/2004. In view of deemed definition of manufacturer, the appellant is a ‘manufacturer-exporter' and an actual user (industrial). If that be so, the appellant has to utilize the goods for the manufacture of goods on his own account and not on account of somebody else whose name does not figure in the EPCG licence. It is also an admitted position that the name of the mine owner, M/s KJS Ahluwalia does not figure in the EPCG licence issued to the appellant. If that be so, violation of condition NO.5 of Notification NO. 97/2004-Cus stands clearly established and accordingly, the appellant would not be eligible for the benefit of the aforesaid exemption. A fine imposed should have nexus with the profit that could have been made on the sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation conducted revealed that the appellant had declared the registered address which is actually a residence of one Shri Gautam Das, who was assistant to the consultant of the appellant Shri S.K. Mall. Shri Gautam, Das resided at the said address with his wife and no office of the appellant functioned from the given address. Statement recorded from Shri Gautam Das revealed that he worked as per the directions of Shri S.K. Mall and looked after the work at DGFT, Kolkata. He allowed his residence address to be used for mailing purpose and that no office of the appellant was run from the said address which is exclusively used for residential purposes. Shri S.K. Mall, whose statement was recorded on 26/06/2008 under Section 108 of the Customs Act, 1962 also submitted that he acted as a consultant for the appellant and represented them for the issue of EPCG licence. He had advised and arranged for the address of the appellant as Kolkata office and he knew that the said premises was being used by his assistant for residential purposes and there was no office of the appellant at the said address. He mentioned the said address as the appellant had no Kolkata address. 2.2 Statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow" 2.4 The Notification also provided that if the importer is a service provider, he may produce said certificate of installation and usage issued by an independent chartered engineer. The Notification also provides that in case of manufacturer-exporter and merchant-exporter having supporting manufacturers or vendors, the capital goods maybe installed in the factory or premises of such other person whose name and address are endorsed on the licence. 2.5 On completion of the investigation, the following picture emerged. (i) M/s. Sushant Trading did not have any office in Kolkata but still they declared an office address in Kolkata with the sole intention of obtaining an EPCG licence from Kolkata: (ii) They installed the imported capital goods at the mines of M/s.KJS Ahluwaia on hire basis and not at their own mines or factory. (iii) They did not submit the installation certificate in the case of one machine to Customs/DGFT as required under the conditions of the licence. (iv) M/s. Sushant Trading had given the machines on time hire basis along with their services for a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and post-production of the product intended for export are permitted under the EPCG scheme ad under para 9.37 mining is covered under the definition of manufacture' and as per para 5.2 a manufacturer-exporter is eligible for EPCG and no other qualification/criteria is required to be satisfied. As per para 9.38 manufacturer-exporter' has been defined as a person who exported the goods manufactured by him or intended to export such goods. Thus, the only condition for availing the EPCG benefit under para 9.27 of the Foreign trade Policy is that the importer is required to satisfy actual user condition. Vide para 9.4 to 9.6 actual user condition has been sub-divided as actual-user (industrial)' and actual-user (on-industrial)', Actual-user industrial' covers goods required for manufacturing in his own industrial unit or manufacturing for his own use in another unit including a jobbing unit as defined in para 9.6 of FTP. There are three classes of importers- a person who utilises the imported goods for his own use in any commercial establishment carrying on any business, trade or profession; or in any non commercial establishment like hospital, or education or research or in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed a penalty of Rs. 25 lakhs on the appellant for violation of the EXIM Policy relating to EPCG scheme. He also relies on the decision of the Tribunal in the case of Surya Samudra Holiday Resorts (P) Ltd. vs. Commissioner of Customs (Export), Mumbai 2010 (156) ELT 433. 5. We have carefully considered the submissions made by both the sides. 5.1 As per Notification No. 97/2004-Cus dated 17/09/2004, in order to avail the benefit of the said Notification, one of the conditions required to be satisfied is condition NO. 5 which is reproduced below: "(5) that the capital goods imported, assembled or manufactured are installed in the importer's factory or premises and a certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, is produced confirming installation and use of capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow : Provided that if the importer is not registered with central excise or if he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted goods for manufacture in its own industrial unit or for manufacturing for won use in another unit including a jobbing unit and jobbing means processing or working around a raw material or semi-finished goods supplied to job worker so as to complete a part of process resulting in manufacture or finishing of an article or any operation which is essential for aforesaid process as specified in para 9.33. 5.3 In the instant case, the appellant has not used the machinery as a manufacturer-exporter but he has used the same in the mines of M/s. KJS Ahluwalia. The appellant is not a lessee of the said mines. What he has done is, he has rented out the machinery to M/s. KJS Ahluwalia for a consideration of Rs. 180/- per MT. In other words, the appellant has not utilised the machinery for his own purposes but merely rented out the machinery to somebody else. Secondly, the appellant could not be to the actual user (non-industrial)' as defined under the EXIM Policy. 5.4 It is also on record that the DFGT authorities vide order dated 21/07/2010 had held that the appellant had obtained EPCG licence fraudulently and by mis-declaring facts and the imported goods were not installed at the gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in different manufacturing units of the licence holder/specified supporting manufacturer. As an alternative to this, export obligation may also be fulfilled by export of other goods manufactured or service provided by the same firm/company or group company which has the EPCG Licence. The alternative given in the last leg of the Para is an alternative for first and second options. Both first and second option talk of obligation in respect of export of goods. Therefore, the alternative is also only for fulfilling obligation in respect of export of goods and not in respect of export of services. If we consider the alternative to cover an option to fulfill the export obligation for both goods and services required to be fulfilled by the capital goods imported under EPCG Scheme, then that interpretation will amount to adding the words or rendering of services' in both first and second option. Such interpretation will be doing violence to the plain wordings of the Paragraph which is to be avoided. The only interpretation of the alternative clause of this para is that a manufacturer of goods can also fulfill the export obligation by export of other goods and/or rendering of services by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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